Become an Owner Operator
You've been part the U.S. American transportation industry for some time, keeping America moving. You've seen some of the workings of the industry and now you want to know if you're ready to be an Owner/Operator or what you need to be ready because being your own Authority is your goal. Your excitement hasn't clouded your judgment, whether leasing or buying, you know there's a lot more to learn. You want it laid out in front of you and you make the decisions from there. That is exactly what Every Owner Operator Job aims to do for you – give more than enough information for YOU to make good, sound choices.
First Considerations of an Trucking Owner Operator:
Your family. Is everyone willing to work with you to make this work?
Your experience. Driving experience and contacts. It takes experience to know what to do and what you can do, it takes a lot of contacts to keep working. Trucking-related skills and experience. - mechanical - resource management and alternatives.Beyond plan B, you'll need a C and D.
Accounting and book-keeping skills. Two different subjects, you have to do both unless you can afford to pay someone else. Book-keeping: keeping account of ALL your expenses and income, right down to the 'miscellaneous' candy bar. Accounting: the relationship of how each expense and income affects expenses, profit, growth and the over-all business picture.
People skills. You're no longer a company representative, you ARE the company. Would you hire you to deal with the very necessary jerk who's load will pay each month's bills?
Money management. Can you keep a budget while driving someone else's truck? It will be a lot tighter as an O/O. Stress and crises, personal- and business-related. Can you factor in that “things happen?” Scheduled maintenance for yourself and family will prevent “break-downs” and “tie-ups” just like scheduled maintenance for your truck.
Internet skills. In the 21st-century, you need internet skills to grow your business and keep it going. We'll later discuss some of the internet avenues you need to know. Can you ask for help? We'll give you many of the resources you'll need.
Your endurance abilities. When the going gets touch, do you keep going?
Other experience. All management and people
experience will be beneficial. You have the ability to learn or you
wouldn't even be thinking about being an O/O. Your greatest asset
is your flexibility.
Your Truck. Lease or Buy?
A valid consideration, particularly with so many big companies stressing leases. The first question, however, is not lease or buy, or even 'new or used;' the first big question is:
How's your credit?
Particularly leasing, you may find someone who will tell you not to worry about your credit rating, they can get you financed. Yes, they can, and at a very hefty commission for themselves, most likely. The general rule of thumb is $8.00 per credit point. In other words, if you're buying a vehicle at 12% interest, your monthly payment has $96.00 TO CREDIT ALONE; if you're paying 20% interest, that's $160.00/month of your vehicle payment just to pay interest. Yes, the Tax Act of 2003 allows accelerated depreciation of capital purchases; it still won't ever pay you back for paying more in the beginning. Pay for your warranty and taxes up-front, even if you lease so you are not also paying interest on the warranty and taxes. Whatever the sales-person tell you, get it in writing. If they ask, “don't you trust me?” just say, no. No one can sell you a truck on time without making money, you just don't have to support him by yourself. Don't finance your insurance unless you absolutely must.
Leasing a truck: This can be a good way for a seasoned driver to get started in his/her own truck. If you're leasing through a trucking company, they're still responsible that you meet all the qualifications, just as though you were a company driver. You're responsible for the truck, its' maintenance and and the loads you accept. Know your leasing clauses, ask. If you still don't understand the clause, take it home or to your lawyer. If you're being told someone will stand behind you, ask how far behind. Is it a walk-away lease?-the best kind. How many miles are you guaranteed? The miles are your livelihood. Does the math add up? You're responsible for hours of service, your own benefits, etc. You're responsbile for the lease payment regardless what you make. What deductions will/can be taken? How are deductions calculated? If your lease payment is independent of the company you're leased to, you won't be arguing at payroll time. Can you lease on and the company pay your insur
New or used truck?
Used: a used truck may be the one someone else leased. Many dealers offer their inventory on the internet and there are many truck sales ooklets on the stands to help you. Some trucks may have a partial warranty still on it, some will have warranties available. There are many truck manufacturers that will offer good interest rates to get you in their trucks.
How many miles before scheduled maintenance? At about 500-600K miles you'll be looking at replacing or repairing:
- A/C compressor
- air dryer cartridge
- coolant system
- kingpins(front axle)
- tires (how are the tires, now?)
New: Your dream has come true. You're getting a truck that is all yours, knows only your name and your voice. You have to make not only your daily check-list, you need to make a monthly and yearly check-list for the more major things. And you have to think house-keeping; it's no longer someone else's problem. You think you know the rules as a driver, as an owner-operator you're even more legally responsible for knowing, and following, the rules in every state you drive plus the federal regulations.